Founder and former head of cryptocurrency exchange FTX Sam Bankman Fried faces eight criminal charges brought against him by the US Attorney's Office for the Southern District of New York.
According to Arabiya.net, the charges include conspiracy to commit wire fraud, securities fraud, as well as individual counts of securities fraud, wire fraud, money laundering and conspiracy to avoid campaign finance regulations.
The US House of Representatives Financial Services Committee held a hearing on Tuesday regarding the collapse of cryptocurrency exchange FTX, following the Monday night arrest of its founder Sam Bankman-Fried in the Bahamas, as US regulators issued civil and criminal charges against the 2-year-old. The 30-year-old, who was on the list of world billionaires earlier this year before his fortune collapsed.
The Department of Justice and Bahamas authorities said Bankman-Fried, who was previously scheduled to testify before the committee, was arrested pursuant to a US indictment unsealed shortly after the hearing began, according to CNBC.
For his part, the company's new CEO and sole witness to the panel of lawmakers, John J. Ray, said the company has no records whatsoever and uses QuickBooks bookkeeping software to track its multibillion-dollar portfolio.
Ray considered the company's record-keeping procedures old-fashioned embezzlement. In his testimony, which lasted 4 hours, he said: This is just taking money from clients and using it for your own purpose.
The company collapsed and filed for Chapter 11 bankruptcy last month after reports that billions of dollars of FTX clients' money had been moved to Bankman Fried's hedge fund, Alameda Research.
Bankman-Fried was also asked by the Senate Banking Committee to testify at a hearing on Wednesday, which he previously refused to attend.
Prior to his company's implosion, Bankman Fried donated nearly $40 million to candidates, campaigns, and political action committees in the 2022 congressional elections, with most of his declared contributions going to Democrats. FTX Digital Markets co-CEO Ryan Salameh also donated another $23 million, with the majority of his contributions going to Republicans.
J. Ray told the House Financial Services Committee that the founder of cryptocurrency exchange, Bankman Fried, lied when he tweeted that the company had enough to cover all customers' holdings.
Bankman Fried deleted his tweet, which he posted on November 7, just days before he stepped down as CEO of FTX, and his company filed for bankruptcy.
Ray confirmed to lawmakers that Bankman Fried allowed about 1,500 people in the Bahamas to withdraw nearly $100 million 24 hours before the company filed for bankruptcy protection, while other investors were blocked from accessing their accounts.
Wray told lawmakers that much remains uncertain, but what we do know is that liquidation proceedings in the Bahamas were actually filed hours before Chapter 11 proceedings in the United States. He added that during that time period, accounts in the Bahamas were unfrozen, and 1,500 clients were allowed to withdraw more than $100 million in the Bahamas.
